Dowd v. American Surety Co.

Mr. Justice Burnett delivered the opinion of the court. 1. It is first contended that the judgment of condemnation and of recovery of damages against the Pence Company was void, because that corporation had been dissolved by proclamation of the Governor, and, further, because the personal representatives of the decedent were not entitled to be substituted on his death; the contention'on that point being that his heirs should have taken the place of the decedent. As to the dissolution of the corporation, no facts are alleged in the answer authorizing the executive to make such a proclamation. It is said in Section 6717, L. O. L.: “On or before the first Monday in January in each year the Secretary of State shall report to the Governor a list of all corporations which for two years or more next preceding such report have failed, neglected, or refused to furnish any such statement or to pay any such license fee, and the Governor shall forthwith issue Ms proclamation declaring such corporations dissolved and their articles of incorporation revoked and repealed.” Other provisions are made in subsequent sections for the publication of the Governor’s proclamation, for a penalty to be inflicted upon anyone who shall exercise any power under the articles of incorporation after the proclamation has issued, and for the correction by the Governor of any mistake he may have made in filing his proclamation. 2. It is not necessary to determine whether or not such a proceeding would be depriving a corporation of its existence without due process of law. It is enough — 424 — in this ease to say that, as a matter of pleading, the answer is defective in not showing the delinquencies of the corporation authorizing the executive to proclaim its dissolution. In any event, the mere ip si dixit of the Governor is not of sufficient sanction for the dissolution of a corporation, unless lawful reasons therefor are also stated in the pleading. Moreover, it is provided in Section 6708, L. O. L., that: “While such delinquency shall continue, the right of such delinquent corporation, company, or association to transact business shall be deemed to be in abeyance, and such corporation, joint stock company, or association shall not be permitted to maintain any suit, action, or proceeding in any court of justice in this state; but the said delinquency of such corporation or joint stock company or association shall not operate to impair or delay the right of any other person, firm, or corporation. ’ ’ Under this statute, it does not lie in the mouth of the defendant here to count upon the delinquency of its principal as a means of escaping its liability to the obligee in the undertaking, or his representatives. 3. It may be conceded that, if there had been no taking of the land prior to the judgment of condemnation, the action should have been continued in the name of the heirs of the decedent, because upon them would have descended the title to the land subsequently to be taken. In cases where the assessment and payment of compensation for a proposed taking are made a condition precedent to the appropriation, the action must be maintained against the owner of the land, and against his heirs or devisees in case of his death pendente lite. The substance of such a proceeding is to establish an optional price at which, by virtue of the right of eminent domain, the plaintiff may force a sale to itself of the desired premises, which option it may exercise or decline at its election. It is provided, however, in Sec — 425 — tion 6532, L. O. L., that, upon giving security therein provided, the plaintiff corporation in a condemnation action, “without waiting for the trial of the action, * * may commence and prosecute' the work of constructing, operating, and maintaining its proposed ditch, canal, or flume, as the case may be. * * ” Possible sanction for such a procedure is found in Article XI, Section 4, of the State Constitution: “No person’s property shall be taken by any corporation, under authority of law, without compensation being first made or secured in such manner as may be prescribed by law.” The taking having thus been actually accomplished, what remains to be done in the litigation is substantially nothing more than fixing the purchase price of the property already acquired by the plaintiff corporation which must be paid in any event. The land has been taken. The owner has been deprived of it. "What remains is to ascertain and recover what to all intents and purposes is a mere purchase price. This amounts to a chose in action which accrues not to his heirs direct in case of his death, but to his executor or administrator. The conclusion on this point is that, as a matter of law, under the conditions existing in the action at the time, it was proper to substitute his executor instead of the decedent. The purchase price of the premises already taken had been substantially ascertained prior to the death of the original owner of the land. Except for the suit enjoining the filing of the award which has been already mentioned, the action was ripe for judgment in his favor for the amount assessed. His subsequent death pendente lite did not destroy the action, nor admit of the substitution of his heirs. His executors were the proper parties to continue in his stead in the action for the recovery of the amount of damages. — 426 — 4. The principal contention of the defendant surety company is that the so-called arbitration proceedings were had without its knowledge, and that it was not bound by them. It contends that an action should have been tried before a jury, in default of which it is exonerated from its undertaking. It is not so nominated in the bond. That instrument, as expressed therein, was “conditioned for the payment of any and all damages and compensation that may be awarded to the defendant in the above-entitled action. ’ ’ The arbitration was substantially a trial by referees, upon the written consent of the parties as provided in Chapter 6, Title 2, L. O. L. It is said in Section 157, L. O. L., that: ' ‘ Trial by jury may be waived by the several parties to an issue of fact, in actions on contract, and with the assent of the court in other actions, in the manner following: * * By written consent, in person, or by attorney, filed with the clerk. * * ” It is said, also, in Section 160, L. O. L., that “all or any of the issues in the action, whether of fact or law, or both, may be referred upon the written consent of the parties.” In the present instance the parties, in very truth by their written agreement, consented to the reference of the issue of compensation to three referees. The undertaking did not stipulate for a trial by jury. The method of trial was left open, and the defendant here was bound to know that a possible mode was the one substantially adopted in that action. The court rendering judgment for condemnation and compensation for the taking was a court of general jurisdiction, with the parties before it, and the right to determine the kind of action in hand. Under such conditions it has rendered its judgment. If erroneous at all, it is in the mere details of procedure to which the parties — 427 — themselves agreed, and it cannot be collaterally assailed in this action. As stated by the Supreme Court of Michigan, in Lothrop v. Southworth, 5 Mich. 436, speaking of a surety on an injunction bond: “His obligation as surety in the bond is to pay to Lothrop all such damages and costs as should be awarded against Southworth in the chancery suit. This obligation was broken as soon as a decree awarding damages was made, and the execution thereon returned unsatisfied. It did not extend back of the decree, and relate to matters upon which it was founded. The condition was broken upon nonpayment, and the proof of the breach maintains the action, This is the rule in all cases. In those cited by the defendant’s counsel, where it was held that the judgment against the principal is not conclusive upon the surety, and in all others of the same character, it is so held because the undertaking related to the cause of action; in the present case the undertaking relates to the result. The cause was to be litigated by Lothrop and Southworth; Cleveland (as surety) could not be heard in court, as he had no interest in the subject of the controversy. He, as an indifferent person, stepped in to the aid of Southworth, to enable him to prosecute his action, and undertook that he should abide the judgment of the court. He can therefore raise no question of the correctness of the decree, nor impeach it in this collateral proceeding. ’ ’ We cannot in this case sit as upon an appeal by the Pence Company from the judgment rendered in the condemnation action. We can only accept the results as declared by the court of competent jurisdiction in its judgment. That determination, as a matter of procedure, was a legitimate statutory result of the litigation which must have been in the contemplation of the surety when it signed the undertaking in the language quoted. The cases cited by the defendant are those where, either the surety has been deprived of some security or remedy, or the judgment against its princi — 428 — pal was fraudulent or collusive to its damage, or a new contract was substituted for the one secured, or they depend upon some particular wording of the undertaking involved. None of such conditions appears here. 5. Neither is it of any consequence that the principal became insolvent, for it does not appear to be attributable to the plaintiffs, and, moreover, the possibility of that result was one of the strongest reasons for requiring any security at all. The substance of the whole matter is that the defendant here made itself a party to the actual taking of the property of another, and agreed absolutely and at all events to pay the compensation to be awarded in the action. It reserved no alternative in the matter., A measure of compensation has been legitimately awarded. The defendant has not paid. It should be compelled to pay. The judgment of the Circuit Court was wise and just. It is affirmed, with the stipulated qualification that interest on the amount of the award shall be calculated at the statutory rate only from December 2, 1911. Affirmed. Mr. Chief Justice McBride, Mr. Justice Moore and Mr. Justice Ramsey concur.